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The kiss of death that Ferrari is in danger of getting...

Discussion in 'Ferrari Discussion (not model specific)' started by juicert, Apr 5, 2004.

  1. juicert

    juicert Rookie

    Mar 17, 2004
    46
    Enjoying the current thread regarding whether or not ferrari is in danger ... days numbered, etc. However, there is one topic that has not been discussed which is worth mentioning.

    Take a look at the high end luxury marques that have, in the last decade or less, introduced a smaller/budget/lesser version of their cars ... Range Rover with their little rav4-style car ... Lexus with the is300 ... AM general selling out the hummer to GM making a 50k Tahoe. Those new mini jaguars. You get the picture.

    In the short run, these decisions are _great_ - you leverage the luxury brand and all that has been built up behind it over the years - all the mystique, the popularity, the exposure, etc., and you quickly convert that into massive sales numbers for the "suddenly affordable" models. In the short run it is a great move, and companies like Ford (jaguar, range rover) and GM (hummer) and Lexus are doing it because they are beholden to shareholders that need to see sales growth NOW.

    In the long run, these decisions will ruin these brands. Most of the sales of the cars mentioned above are based on their prestige and cost - all the intangibles that those companies are now exploiting to boost revenue for the next 3-4 quarters. After 4-5 years of every college kid driving an is300, how many folks will be buying a LS400 ? Some ... but not as many. Same with the jag and especially the hummer.

    So - I propose to you that the real danger to ferrari is the 60-75k model that they _must_ feel pressure to introduce. After the mass production and explosive popularity of the 360, who can claim that nobody at Ferrari is doing the math and seeing what 4x the sales of a 75k model would add up to ?

    I am not saying they will do it - I suspect they won't - but I will claim that this is the real danger. Lambo is not in the same fix, because for them, the Gallardo _is_ the affordable model after all those years of 250k+ Diablos. It is a danger for Ferrari though...

    Comments ?
     
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  3. JSinNOLA

    JSinNOLA F1 World Champ
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    Mar 18, 2002
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    I really hope that they do not stoop to this level. Sacreligous!
     
  4. PSk

    PSk F1 World Champ

    Nov 20, 2002
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    Pete
    Wrong!

    Think Maserati and Alfa Romeo and you will see that the FIAT group already have that market sorted out.

    Pete
     
  5. zjpj

    zjpj F1 Veteran

    Nov 4, 2003
    5,938
    USA
    IS 300 in college is relatively absent. it's all 3-series. They are so ubiquitous it's incredible.
     
  6. Cavallini

    Cavallini Formula 3

    Nov 2, 2003
    1,818
    Maserati solves that problem easily. Or Alfa Romeo, which is palnning to produce an "affordable" convertible through some affiliation with GM. Alfa is also planning to produce a Maserati, Porsche Turbo, and Aston AM V8 rival that looks better than all of them.

    This level of automobile is not and should never be Ferrari's concern. Ferrari is a boutique designer all in one; the Brioni or Caracelli of automobiles, not Hugo Boss, Calvin Klein or even Armani.


     
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  8. LAfun2

    LAfun2 F1 Veteran

    Oct 31, 2003
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    I disagree. All depends on what college you go to. Plenty of IS300s here and the kids will be moving up to the Gs430 line.
     
  9. bluekawala

    bluekawala Formula Junior

    Jan 22, 2004
    430
    Ormond Beach, FL
    LOL, yes, it does depend on the college. Everyone here has a 5 year old Toyota or truck. They will probably upgrade to $50k diesel 4 door duelly trucks and new Camery's with leather.

    Back to the question... I don't think Ferrari or Lambo will stoop so low, IMO. Whenever anyone in the company speaks of the cars they all talk of the prestige of the mark etc that IMHO would be lost if you saw 32 Ferraris in every suburban neighborhood. Everyone wants to turn a profit, but I think Ferrari would rather put their name on a DVD player then sell a car to every other soccer mom on the road.

    Happy Driving!
     
  10. agent.5

    agent.5 Rookie

    Jan 16, 2004
    2
    And that German car maker even go as low as bringing out a truck. These are days of quarterly profits, cashing out stock options, and Enron accounting. So, I will not be surprised that some execs will decide that the House of Italian horse needs a low-end car or truck, because he or she needs a big score and a bigger paycheck now.
     
  11. shelbee

    shelbee Guest

    BUT FERRARI IS FERRARI!!!!!
     
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  13. judge4re

    judge4re F1 World Champ

    Apr 26, 2003
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    The business model you mention is designed to create brand loyalty and have people move up the model ladder as their incomes improve. With shrinking margins, you have to increase your sales numbers to get the same return on investment.

    I'd really like to see the actual numbers on the new AMG models. I'm guessing that MB is really loosing money on the 65 series cars. Maybach wasn't even designed to break even for 10 years!!!

    Welcome to the world of image and ego, screw fiscal responsibility!!!

    I hope Napolis chimes in and lets us know exactly how much these companies have lost in the last 3 years on the niche brands.
     
  14. tjacoby

    tjacoby F1 Rookie

    Nov 1, 2003
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    tj
    I agree with Pete: Ferrari's been quite clear in their marketing - Maseratti is the volume product, Ferrari is limited-volume and should always have waiting lists. So I take that to mean that we could see a Maseratti SUV but not a Ferrari?
     
  15. zsnnf

    zsnnf Formula 3

    Sep 11, 2003
    1,877
    With a two year waiting list on the 360, what would be the point of building a "Cheap" Ferrari?
     
  16. Tyler

    Tyler F1 Rookie

    Dec 19, 2001
    4,274
    dusty old farm town
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    I diagree with this in every way. I'm an LS man and I really don't care what "kids" are driving these days. Every been in an IS300?? It's not hard to tell why it's less than half the price of an LS.

    The Jag X-type, LOL. Trust me, the people who buy the XJ sedans really don't care if someone else wants to buy a fancy contour.

    You surely must be joking about the Hummer. The H2 has been a home run financially and in no way turns off the H1 customer. Polar opposites as to the customer they appeal to.

    Saying that these decisions will ruin the brands is a stretch. Look at Cadillac. They have good sales, even though once a decade they launch some $hitbox car that they stamp Cadillac on(catera, cimarron). The only thing that gets hurt by Caddy doing this is the low end consumer who buys this garbage to begin with.

    I'm gonna take a moment and don my Nomex suit....OK....here it is Juice, Ferrari allready has an entry level new car. It's the Modena. Though many don't like to admit it, it IS the entry level new Ferrari.

    Now, to be practical, there are lots of "entry level" Ferraris on the used market. Exotic cars are like planes and boats, because of their high cost there is an incentive to take care of them and that creates a great secondary market. Like planes and boats, lots of people start with a used one and work their way up.
     
  17. Mitch Alsup

    Mitch Alsup F1 Veteran

    Nov 4, 2003
    7,054
    What you say might be an accurate rendition of the market If Ferraris long term strategy is to grow as big as it can and sell as many cars as it can.

    However, Ferraris current strategy is to make a few cars and make them so good that people are willing to wait years to be able to buy one new from the factory. Under this model, building more factory capacity than fits the demand in the worst sales year possible, it a loosing tactic, not a winning one. Many famous products are made in the handfulls where demand in the several-handsfull. Those who can find such a niche can live a long and prosperous life.

    Forza Ferrari.
     
  18. Ade

    Ade Formula 3

    Jan 31, 2004
    2,095
    UK
    Totally agree - it makes no sense to tarnish 'Ferrari'. Maserati is a good name within itself, and most Maserati owners know of the connections with Ferrari, these cars filling the gap at 60K
     
  19. Gatorrari

    Gatorrari F1 World Champ
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    Feb 27, 2004
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    Jim Pernikoff
    To me, the "inexpensive" Ferrari already exists, and it's called.....Maserati!
     
  20. Willis360

    Willis360 F1 Rookie

    Aug 4, 2001
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    Why do you think you'll be flamed by that? I thought it's generally known that the 360 is the "entry level" Ferrari. The V8s have alway been the "affordable" line of cars for Ferrari.

    I freely admit that I own an entry-level Ferrari. A pretty good one at that! :)
     
  21. Napolis

    Napolis Three Time F1 World Champ
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    Oct 23, 2002
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    Jim Glickenhaus
    A few points.
    Ferrari makes more from licencing revenue than selling cars.
    Ford will NEVER recoup the 5 billion it payed for Jag.
    VW will NEVER recoup the $ it payed for Lambo, Bugatti, and Bentley.
    MB/C speaks for itself.
    It's a tough business and it's getting tougher.
    Ferrari is doing fine and with the economic expansion in China and Russia will be able to sell every Ferrari it can produce. Maser is IMHO more problematic but they do have a certain something and over time they'll get that right too.
    The Enzo and their F1 cars set the standard and the new 360 will a be nice answer to the Gallardo. Their next car always is.
    As an aside the Cayenne is a MAJOR homerun for P.
     
  22. G-force

    G-force F1 Rookie

    Aug 4, 2002
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    The Enzo and their F1 cars set the standard and the new 360 will a be nice answer to the Gallardo. Their next car always is.
    As an aside the Cayenne is a MAJOR homerun for P.[/QUOTE]


    Problem is Ferrari is not setting the standard but rather trying to play catch-up. By the time the 360 replacement hits the bricks Lamborghini will probably have a Gallardo SV?
     
  23. Hubert

    Hubert F1 Rookie

    Jan 3, 2002
    2,642
    The Left Coast
    The real "problem" here is that people are still thinking of Ferrari as a car company. They're not. They're a business conglomerate that happens to build street cars for discerning customers. Like Mr. G pointed out, F makes more on it's name and street cred than it does on it's car sales; F can afford to bank on it's name, ad infinitum. You don't have to catch up, if you exist within your own niche. Whether or not you feel that Ferrari's cars are aptly valued per the current market is up to your own discretion, but most every personal opinion is. Lastly, Lambo, et al, are trying to crash in on Ferrari's self constructed niche, and this is why they're releasing cars that offer more "value"; however, as I've already pointed out, Ferrari's got the ball in it's court.
     
  24. Napolis

    Napolis Three Time F1 World Champ
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    Oct 23, 2002
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    Jim Glickenhaus

    Problem is Ferrari is not setting the standard but rather trying to play catch-up. By the time the 360 replacement hits the bricks Lamborghini will probably have a Gallardo SV?[/QUOTE]
    Wayne
    As last sunday showed their F1 cars are fine. In the FIA races their 550's and 575 are also winning. The Maser/Enzo will probably be a contender something the Murcie GTR isn't looking like.
    On the road there is no Lambo like the Enzo. As for the next Gallardo if you read VW's latest financial's you'll see what's happening to developement spending at Lambo. It's being cut.
     
  25. nickdtm

    nickdtm Rookie

    Mar 21, 2004
    41
    Annapolis, MD
    Porsche can barely build its sports car for $75k... that is a pretty bare-bones 911. What makes you think Ferrari could ever do that? Maser's aren't even that cheap. I'd be shocked to see any new Ferrari list for under $130k in the future.
     
  26. G-force

    G-force F1 Rookie

    Aug 4, 2002
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    wayne skiles
    You may be right..time will tell.... your point certainly has some validity.
     
  27. bostonmini

    bostonmini Formula 3

    Nov 8, 2003
    1,881
    I honestly think the core buyers of ferrari's just dont cross shop...whether its a 360 or an enzo, they dont look at whats available from other builders...just what the newest fcar is!
     
  28. Willis360

    Willis360 F1 Rookie

    Aug 4, 2001
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    And that's bad because....?
     

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